INVESTMENT COMMITTEE MEETING

JULY 29, 1999

An Investment Committee Meeting was held Thursday, July 29, 1999 at the Como Restaurant, 2220 Pine Avenue, Niagara Falls, New York. Time :

12:JOpm .

Present for the meeting were:

Mr. Michael Quarcini, Mrs. Cheryl Cicero,

Mr . Edward Carlo, Mr. Mark Congi, Mr. Dominick Dellaccio, Mr . Angelo Massaro, Mr. Frank Mirabelli and Mr. Don Smith.

Also present for the meeting were :

Mr. Eugene Salisbury ; Attorney, Mr.

Dan Parisi; Fund Consultant and Mrs. Jo .Anne Govern; Administrator.

Mr. Mirabelli called the meeting to order.

The minutes from May 21, L999 and July 23, 1999 were both tabled until the next meeting.

The Board discussed dropping Clover Capital, leaving ten million with Manning and Napier, also dropping HGK and Executive. There was no vote

taken .

Mr.	Parisi	presented	a proposed allocation sheet to	the	Board (copy
attached). He pointed 48,545,508 .10, also never			out the total assets as over 100/0 in specialty categories. of June		30 , 1999	are

During the discussion of the allocation sheet, Mr . Massaro asked why were

no bonds given to Marine Midland? cap investors.

Mr. Parisi stated they are mainly large

Mr . Parisi began a discussion of fee schedules.

It

was

stated that with

Manning and Napier the fee structure changes below ten million. The Board decided to address the matter if it comes up .

The Board discussed Harold C. Brown with accounts in two funds (Welfare

and Pension) . About

two years ago they made the fee schedule the same for

GOVERNMENT

EXHIBIT

GJ-2

Welfare and Pension. Mr. Salisbury suggested have them manage stocks and bonds, split out the fees.

The fee schedule for Freedom Capital and Niagara Investment Advisors is very similar as well as Key and Manning and Napier. Wright Investor Services and Phoenix are both good bond managers. Mr. Massaro stated that Niagara is high in the fee area at 90 basis points.

Mr. Mirabelli asked is the fee schedule the best? was suggested that we watch extremely close.

Mr. Parisi replied "yes".

It

We have solid management in place. Mr. Parisi feels the fee schedules are

not as important as the managers.

He feels

all

the

money managers will

negotiate the fees.

The fees

are

as they were presented at

the

interview

meetings. He will go to work on the fee structures.

Mr. Mirabelli asked if the Board members want to go through the proposed allocation manager by manager.

Mr.

Quarcini

stated

that

he

feels

we

should

put

all

OLU"

monies

with

investment managers as opposed to any banking institutions because of the

fact

that

the investment

firms

deal

only

in investments.

It was decided that we accept the proposed allocation provided that in six months we take a look see how each is doing and in another six months look again and take the top five managers. Mr. Quarcini stated that we'd give them one year to prove themselves.

Mr. Parisi stated going forward, each manager would have their own set of guidelines. Mr. Parisi and Mr. Salisbury will re-write the investment guidelines for each manager. The managers must perform up to the index numbers.

A discussion was held on the banking institutions. Mr. Parisi stated that the banks have no trust department (Key). The trust departments at one time were giving the banks a bad name. They now have their own investment departments.

Mr.	Quarcini	inquired	whether	we	are looking	at	each	manager	by
classification.		Me Parisi replied "yes".			Mr. Mirabelli stated in theory the

Board is committing to one year .

Mr.

Parisi stated

a

full

market cycle is

eighteen months.

Mr. Salisbury stated let's get things in place and at the end

of a year take a look, make some adjustments if need be. Mr. Don Smith said we're making adjustments now, we should continue to do so within a shorter period of time. Mr. Smith and Mr. Massaro feel the allocation is uneven.

A lengthy discussion was held regarding allocation . It was stated that we had added six managers not five (Wright Investor Services-another bond manager).

Mrs.

Cicero made

a motion

to accept the

allocation as presented by Mr.

Parisi, 2 ^nd by Mr. Smith.

Amendment to the motion provided it is revisited

in one year - unanimously carried .

Mr.

Massaro made a motion for Mr. Parisi's fee to be based on seven basis

points of the total

plan assets.

retroactive adjustment.

The Board will review.

There may be

a

The next Investment Committee Meeting is scheduled for September 1999.

A motion	to adjourn was		made	by	Mr.	Mirabelli,
unanimously carried.		Time:	1:45pm.

2 ^nd

by

Mr.

Carlo

-

Respectfully submitted,

Jo.anne _Govern

Administrator